While local phone giant SBC drew considerable fire last week for a
service offering to Internet telephony providers, fellow carrier
BellSouth has been selling similar services for more than a year
without any protest -- at least before the SBC furor.

BellSouth began in mid-2003 to sell wholesale access services that let
Internet phone service providers complete customer calls on
BellSouth's local phone network. The service package raises the costs
to Internet phone companies, which is what drew criticism when SBC
unveiled its Tiptop service package late last week.

The Tiptop furor included rare public criticism from Federal
Communications Commission Chairman Michael Powell, who warned that the
FCC would not tolerate local phone companies raising prices to hurt
Internet telephony rivals. The debate has cast a spotlight on
BellSouth's own offering.

"It's fair to say that Chairman Powell was also sending a signal to
BellSouth," an FCC spokesman said Monday.

But there are several key differences keeping BellSouth's product in
the good graces of regulators, while all but dooming the future of
SBC's new offering -- differences that may help further sort out how Net
phones will be regulated.

"These are apples and oranges," a BellSouth spokesman said.

[...]

Tiptop apparently goes too far, according to several sources familiar
with the FCC's perspective. While BellSouth's program for VoIP
providers is just a service option, paying for Tiptop is the only way
those providers can connect to SBC's network, according to the FCC. An
FCC spokesman said on Monday that Tiptop created a large number of
complaints from potential customers, while BellSouth's offering did
not.